Tua Moala Pty Ltd (In Liquidation) ACN (the Company)

Transcription

1 Tua Moala Pty Ltd (In Liquidation) ACN (the Company) Liquidator s Statutory Report to Creditors Friday, 27 October 2017 Cameron Crichton Joint and Several Liquidator T (07) E cameron.crichton@au.gt.com Michael Gerard McCann Joint and Several Liquidator T (07) E michael.mccann@au.gt.com

2 Introduction I refer to my initial correspondence to creditors dated Friday, 25 August in which I advised you of Michael McCann and my appointment as liquidator and your rights as a creditor in the liquidation. The purpose of this report is to: Provide you with an update on the progress of the liquidation. Advise you of the likelihood of a dividend being paid in the liquidation. We have relied on information provided from numerous sources to prepare the report, including: Discussions with the Director of the Company, Mr Tua Moala. Discussions with the Secured Creditor, TL Rentals Pty Ltd Discussions with the Company s current and former accountants. Information available from public sources, such as, Australian Securities and Investments. Commission (ASIC) and the Personal Property Securities Register (PPSR). A review of the Company's books and records provided to date. Whilst I have no reason to doubt the accuracy of any information, I have not performed an audit and reserve the right to alter my conclusions, should the underlying data prove to be inaccurate or change materially from the date of this report. Update on the progress of the liquidation Circumstances leading to winding up The Company was registered on 16 June 2011 and operated from North Lakes QLD The Company operated in the Media and Telecommunication sector and provided telecommunications services for Service Stream Pty Ltd. On the 17 June 2017, prior to our appointment, a related party to the director (understood to be his sister - Nofomuli Moala) registered i50four Technology Pty Ltd with a view to taking an assignment of the Company s business assets and liabilities. Our investigations have indicated that on 01 July 2017 staff who were previously employed by the Company were transferred to i50four Technology Pty Ltd. Our investigations confirm that the Company did not formally assign the assets to I50 Four Technology Pty Ltd prior to our appointment. The Company had one customer, Service Stream, who terminated their engagement following the appointment of the Liquidators. Assets and liabilities The Director of the Company is required to complete and provide to the Joint and Several Liquidators a statement about the Company's business, property, affairs and financial circumstances, also known as the Report as to Affairs (RATA). The RATA is a snapshot in time as at the date of my appointment of the assets and liabilities of the Company, disclosing book values and the Director s opinion on the estimated realisable value (ERV) for assets. On Friday, 04 August 2017 a written request was issued to the Director to complete the RATA for the Company.

3 On 23 August 2017 the Report as to Affairs and Director s Questionnaire was submitted by the director. Below is an analysis of the assets and liabilities of the company, and comparison to the RATA as provided by the Director. The estimated realisable value for the motor vehicle has been withheld due to the commercial sensitivity of the asset. Assets Item Director's RATA Book Value ERV ($) ($) Liquidator's ERV ($) Interest in land Sundry Debtors 37,687 37,687 37,687 Cash on hand Cash at bank 3,304 3,304 1,023 Stock on hand - - Work in progress Plant and Equipment - 1,000 Other Assets - - 2,000 Sub Total 40,991 40,991 41,710 Assets subject to specific charges 296,739 - Withheld Less amounts owed to secured creditors (270,779) - 300,338 Total Estimated Realisable Values 66,951 40,991 N/A Liabilities Employee Entitlements Amounts owing to secured creditors Preferential claims ranked behind secured creditors Amounts owing to partly secured creditors Unsecured creditors ,884 Total amounts claimed ,884 Estimated Surplus/ (deficiency) N/A The below table outlines the known creditors of the Company as at our appointment Creditor Address Debt ($) Related Party ATO (Insolvency) PO Box 9003 Penrith NSW ,298 No Singtel Optus Pty Ltd Locked Bag 993 North Sydney NSW ,048 No FlexiRent Capital Pty Ltd Locked Bag 5005 Royal Exchange NSW ,538 No VISIS Accounting Service GPO Box 7043 Brisbane Qld ,202 No TL Rentals Pty Ltd PO Box 1234 Chatswood NSW ,981 No Total 318,067

4 Receipts and Payments to date The table below contains the details of receipts and payments in the liquidation period from 04 August 2017 to 25 October Receipts and payments as at 25 October 2017 $ Receipts Cash at bank 1,023 Accounts Receivable (Pre Appointment) 37,687 Total Receipts 38,711 Payments - - Total Payments - Net Receipts/ (Payments) 38,711 Actions undertaken to date Since appointment I have undertaken the following tasks: Advised creditors of my appointment as liquidator; Arranged insurance cover; Issued correspondence to the Director of the Company requesting copies of books and records and a Report as to Affairs; Held meetings with the director of the Company; Commenced my own investigations into matters affecting the Company; Received and responded to creditor queries regarding the liquidation of the Company; Realised debts of the Company; Engaged with I50Four Technology Pty Ltd regarding the sale of plant and equipment and goodwill of the Company Engaged with TL Rentals Pty Ltd regarding their security interests registered against the Company and investigated the validity of those registrations; and Complied with my statutory obligations Sale of Business Following discussions with the director, we were advised that i50four Technology Pty Ltd wished to purchase various plant and equipment and goodwill off Tua Moala Pty Ltd. I50 Four Technology Pty Ltd offered c$3k for the Company s limited plant and equipment and goodwill. Our agents advised that the plant and equipment was worth c$1k. As this offer is a superior outcome to that likely to be achieved from an auction of the equipment (noting goodwill is arguably negligible) the offer was agreed and an invoice for same has been issued. Investigations and possible recovery actions PPSR Investigations Our initial PPSR review indicated that there were four vehicles subject to security interests (held by TL Rentals Pty Ltd). Of these four security interests, three were perfected on the PPSR and as no equity existed in the leases they were disclaimed. On appointment it was the Liquidator s view that registration of the security interest for the fourth vehicle was not perfected. We were of the opinion that section 588FL of the Corporations Act 2001

5 (Cth) (the Act ) applies and title of the vehicle vests in the company. The realisable value has been withheld due to the commercially sensitive nature of the dispute. Our investigations into the security interest included: Reviewing the registration on the PPSA; Reviewing the lease agreement and terms and conditions of the contract; Reviewing the invoice associated with the sale of the asset; Reviewing the registration details of the vehicle with the Department of Main Roads; and Confirming the date the Company obtained possession of the vehicle. Our negotiations with TL Rentals Pty Ltd continue. The vehicle is currently with our sales agent and subject to determining the PPSA dispute, a sale campaign will commence shortly. Investigations undertaken I have commenced my initial investigations into the affairs of the Company prior to my appointment and any potential recovery actions that may be available to the Joint and Several Liquidators to pursue. To date, we have undertaken the following investigations: What happened to the business of the Company If there were any potential insolvent trading claims or voidable transactions. My findings of these investigations are detailed below. While we are satisfied that our investigations are complete, we reserve the right to undertake further enquiries should further information become available. What happened to the business of the Company The Director has stated the following reasons for the Company's financial difficulties and the ultimate need to have the Company wound up. Inefficient cash flow management Lack of business acumen My investigations into the affairs of the Company, confirm that the Company's difficulties were brought about by reasons identified by the Director. In addition, I also note the following Poor financial control including lack of records; Poor strategic management of business; and Inadequate cash flow or high cash use Insolvent trading I have reviewed both the cash flow and balance sheet tests of insolvency and have determined that the Company likely became insolvent at least months prior to our appointment based on the following factors: Non-payment of statutory debt; Unprofitable trading; and Lack of aged creditor details and incomplete account records. Our ability to recover funds from any potential insolvent trading claim is predicated by the financial position of the director. We have conducted a motor vehicle and property search of the director and to date have not identified any assets in his name. An insolvent trading claim is therefore unlikely to be pursued. Voidable transactions My preliminary investigations have not identified any recoverable unfair preference claims, uncommercial transactions, unfair loans or unreasonable director-related transactions.

6 Further inquiries to be undertaken We have submitted our report to ASIC pursuant to s533 of the Act and will liaise with them should a supplementary report be required. Should no further report be required I do not expect any further investigations to be undertaken for the following reasons: There is no evidence of voidable transactions; and There is no evidence of other recoveries for creditors. Meetings held I have not been required to hold and therefore I have not held any meeting for the Company since my appointment. A meeting will be held in the coming weeks and creditors will be notified of this. Other matters Outstanding matters of the liquidation are: Realise remaining assets; Finalise investigations; Hold meeting of creditors; and Make distribution to creditors, if possible. Likelihood of a dividend On realisation of the Toyota Hilux, the position on a dividend to creditors and the quantum of same can be confirmed. Currently, we expect to be able to pay: A dividend to unsecured creditors in the range of 1 to 8 cents in the dollar within 3-6 months. When I am ready to declare a dividend, any creditor whose claim has not yet been admitted will be contacted and asked to submit a proof of debt. This formalises your claim in the liquidation and is used to determine all claims against the Company. Cost of the liquidation I am not seeking approval of any remuneration at this time, however, approval be sought at a creditors meeting to be called in the coming weeks. I will provide creditors with the required remuneration report and details of same in due course. What happens next in the liquidation? We will write to you in the coming weeks in relation to convening the meeting of creditors. We may write to you again with further information on the progress of the liquidation. We expect to have completed this liquidation within 3 6 months. Compliance with best practice I confirm that this report complies with the requirements in the Insolvency Practice Rules (IPR), specifically IPR 70-40, as well as the statements of best practice issued by the Australian Restructuring Insolvency and Turnaround Association (ARITA) with regard to content of the

7 Statutory Report by a Liquidator and the Code of Professional Practice with regard to remuneration. What to do next You should now: Read the report and appendixes Contact my office should you have any queries Complete and return your proof of debt Where can you get more information? You can access information which may assist you on the following websites: ARITA at ASIC at (search for insolvency information sheets ). Should you have any queries with respect to the above, you may also contact Benjamin Sanders of my office on (07) or via on benjamin.sanders@au.gt.com. There is also information about this liquidation on our firms website. Dated: Friday, 27 October 2017 Cameron Crichton Joint and Several Liquidator List of attachments Appendix A - Creditor s rights in a liquidation Appendix B Proof of debt

8 Appendix A Creditor s Rights in a Liquidation

9 Creditor Rights in Liquidations As a creditor, you have rights to request meetings and information or take certain actions: Right to request a meeting Right to request information Right to give directions to liquidator Right to appoint a reviewing liquidator Right to replace liquidator Right to request a meeting In liquidations, no meetings of creditors are held automatically. However, creditors with claims of a certain value can request in writing that the liquidator hold a meeting of creditors. A meeting may be requested in the first 20 business days in a creditors voluntary liquidation by 5% of the value of the debts held by known creditors who are not a related entity of the company. Otherwise, meetings can be requested at any other time or in a court liquidation by: > 10% but < 25% of the known value of creditors on the condition that those creditors provide security for the cost of holding the meeting 25% of the known value of creditors creditors by resolution, or a Committee of Inspection (this is a smaller group of creditors elected by, and to represent, all the creditors). If a request complies with these requirements and is reasonable, the liquidator must hold a meeting of creditors as soon as reasonably practicable. Right to request information Liquidators will communicate important information with creditors as required in a liquidation. In addition to the initial notice, you should receive, at a minimum, a report within the first three months on the likelihood of a dividend being paid. Additionally, creditors have the right to request information at any time. A liquidator must provide a creditor with the requested information if their request is reasonable, the information is relevant to the liquidation, and the provision of the information would not cause the liquidator to breach their duties. A liquidator must provide this information to a creditor within 5 business days of receiving the request, unless a longer period is agreed. If, due to the nature of the information requested, the liquidator requires more time to comply with the request, they can extend the period by notifying the creditor in writing. Requests must be reasonable. They are not reasonable if: Both meetings and information: (a) complying with the request would prejudice the interests of one or more creditors or a third party (b) there is not sufficient available property to comply with the request (c) the request is vexatious Meeting requests only: (d) a meeting of creditors dealing with the same matters has been held, or will be held within 15 business days Information requests only: (e) the information requested would be privileged from production in legal proceedings (f) disclosure would found an action for breach of confidence (g) the information has already been provided (h) the information is required to be provided under law within 20 business days of the request If a request is not reasonable due to (b), (d), (g) or (h) above, the liquidator must comply with the request if the creditor meets the cost of complying with the request. Otherwise, a liquidator must inform a creditor if their meeting or information request is not reasonable and the reason why. ARITA ACN Level 5, 191 Clarence Street, Sydney NSW 2000 Australia GPO Box 4340, Sydney NSW 2001 t e admin@arita.com.au arita.com.au AUSTRALIAN RESTRUCTURING INSOLVENCY & TURNAROUND ASSOCIATION

10 Right to give directions to liquidator Creditors, by resolution, may give a liquidator directions in relation to a liquidation. A liquidator must have regard to these directions, but is not required to comply with the directions. If a liquidator chooses not to comply with a direction given by a resolution of the creditors, they must document their reasons. An individual creditor cannot provide a direction to a liquidator. Right to appoint a reviewing liquidator Creditors, by resolution, may appoint a reviewing liquidator to review a liquidator s remuneration or a cost or expense incurred in a liquidation. The review is limited to: remuneration approved within the six months prior to the appointment of the reviewing liquidator, and expenses incurred in the 12 months prior to the appointment of the reviewing liquidator. The cost of the reviewing liquidator is paid from the assets of the liquidation, in priority to creditor claims. An individual creditor can appoint a reviewing liquidator with the liquidator s consent, however the cost of this reviewing liquidator must be met personally by the creditor making the appointment. Right to replace liquidator Creditors, by resolution, have the right to remove a liquidator and appoint another registered liquidator. For this to happen, there are certain requirements that must be complied with: Meeting request Information and notice Resolution at meeting A meeting must be reasonably requested by the required number of creditors. Creditors must inform the existing liquidator of the purpose of the request for the meeting. Creditors must determine who they wish to act as the new liquidator (this person must be a registered liquidator) and obtain: Consent to Act, and Declaration of Independence, Relevant Relationships and Indemnities (DIRRI). The existing liquidator will send a notice of the meeting to all creditors with this information. If creditors pass a resolution to remove a liquidator, that person ceases to be liquidator once creditors pass a resolution to appoint another registered liquidator. For more information, go to Version: July (LIQ) - INFO - CREDITOR RIGHTS INFORMATION SHEET V1_0.DOCX AUSTRALIAN RESTRUCTURING INSOLVENCY & TURNAROUND ASSOCIATION PAGE 2

11 Appendix B Proof of Debt

12 ACN FORM 535 Corporations Act (2001) Subregulation (2) FORMAL PROOF OF DEBT OR CLAIM (GENERAL FORM) To the Liquidators of Tua Moala Pty Ltd (In Liquidation) 1. This is to state that the company was on Friday, 4 August 2017 (date of court order in winding up by the Court, or date of resolution to wind up, if a voluntary winding up), and still is, justly and truly indebted to: (full name and address of the creditor and, if applicable, the creditor's partners. If prepared by an employee or agent of the creditor, also insert a description of the occupation of the creditor) for $ and cents. Date Consideration (state how the Debt arose) Amount $ c Remarks (include details of voucher substantiating payment 2. To my knowledge or belief the creditor has not, nor has any person by the creditor's order, had or received any satisfaction or security for the sum or any part of it except for the following: (insert particulars of all securities held. If the securities are on the property of the company, assess the value of those securities. If any bills or other negotiable securities are held, show them in a schedule in the following form). Date Drawer Acceptor Amount $c Due Date *3. I am employed by the creditor and authorised in writing by the creditor to make this statement. I know that the debt was incurred for the consideration stated and that the debt, to the best of my knowledge and belief, remains unpaid and unsatisfied. *3. I am the creditor's agent authorised in writing to make this statement in writing. I know that the debt was incurred for the consideration stated and that the debt, to the best of my knowledge and belief, remains unpaid and unsatisfied.... Dated Signature Occupation: Address Proof of Debt Reference: *Do not complete if this proof is made by the creditor personally.